Should I stop day trading?
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I have found that those who require volatility for their setups have done lousy this year and year before. Those who been day trading long time normally have different methods for different situations, trend/chop. Really knowing your market helps big time, some markets run like Crude Oil, Russell and five minute or smaller minutes work well, ES and Nasdaq are prone for more chop(depending on one's definition), forex trades better on 60 minutes or longer for many going for bigger profits. I use to trade five minute stocks long ago, but didn't want to adapt when fractions changed over to pennies. Bigger profits through the years generally have been from longer term trading. My methods shut down trading when there is too much volatility, I have found this year to really be incredible to day trade, very consistent trends in Indexes as I have had weekly bars for past year has been uptrend.
Gotcha ....lol
Venders here usually sign up with the management.
Thanks for everyone's views and advice.
I think I have noticed several trends from all the replies and some conclusions.
1) for the last 2 years volatility has crashed, you only need to look at the vix index to see that. As a result short term day traders who rely on volatility in their setups and trades have suffered. This makes complete sense. Especially for those who traded the last 15 years where for 80% of this time there has been extreme volatility.
2) behind this volatility crash has been the fed. The fed has sought to kill all volatility in the bond and equity markets. We had a glimpse of the old days in May and June this year. The markets were excellent during these months. The short end, the long end and the equities were moving around freely and volatility increased markedly. As soon as volatility increased the fed came in and killed it. This just shows that the market is no longer free and old adages of supply and demand no longer apply. It is in fact a controlled market and the fed continually press the off button whenever volatility increases.
3) the markets controlled by the fed are the traditional bond market and equities. These markets are therefore to be avoided on a daily basis. The only time u should be looking to trade these markets are if you happen to see a big support or resistance level. You trade it once and get out for some profit and get out immediately if your wrong. No longer can you trade these intraday all day.
4). The markets still free from fed influence to an extent are commodities like gold, and oil and fx markets. The fed doesn't directly control these markets. Making these products smoother and tradable intraday.
5). Algos now control the big markets. Because volume has reduced in these bond and equity markets it allows the algos can dominate easily. They can sense when day traders are buying and selling. With the fed controlling the volatility these are therefore perfect times for algos to dominate.
6) Again smaller less liquid and free markets like commodities and fx are less controlled by algos and free from influence making them easier to trade.
I think the conclusion I can draw and which I will try to administer is to avoid trading the bond and equity markets during the day. Only trade these off of major levels and during the market imbalances like the closes when there is free volatility.
Concentrate more intraday on the free markets of commodities and fx.
Any thoughts?
I think I have noticed several trends from all the replies and some conclusions.
1) for the last 2 years volatility has crashed, you only need to look at the vix index to see that. As a result short term day traders who rely on volatility in their setups and trades have suffered. This makes complete sense. Especially for those who traded the last 15 years where for 80% of this time there has been extreme volatility.
2) behind this volatility crash has been the fed. The fed has sought to kill all volatility in the bond and equity markets. We had a glimpse of the old days in May and June this year. The markets were excellent during these months. The short end, the long end and the equities were moving around freely and volatility increased markedly. As soon as volatility increased the fed came in and killed it. This just shows that the market is no longer free and old adages of supply and demand no longer apply. It is in fact a controlled market and the fed continually press the off button whenever volatility increases.
3) the markets controlled by the fed are the traditional bond market and equities. These markets are therefore to be avoided on a daily basis. The only time u should be looking to trade these markets are if you happen to see a big support or resistance level. You trade it once and get out for some profit and get out immediately if your wrong. No longer can you trade these intraday all day.
4). The markets still free from fed influence to an extent are commodities like gold, and oil and fx markets. The fed doesn't directly control these markets. Making these products smoother and tradable intraday.
5). Algos now control the big markets. Because volume has reduced in these bond and equity markets it allows the algos can dominate easily. They can sense when day traders are buying and selling. With the fed controlling the volatility these are therefore perfect times for algos to dominate.
6) Again smaller less liquid and free markets like commodities and fx are less controlled by algos and free from influence making them easier to trade.
I think the conclusion I can draw and which I will try to administer is to avoid trading the bond and equity markets during the day. Only trade these off of major levels and during the market imbalances like the closes when there is free volatility.
Concentrate more intraday on the free markets of commodities and fx.
Any thoughts?
It was already nearly dead last year, that was what prompted me to stop trading altogether this year, I dumped a good chunk of my account into SPY and never looked back.
You can't squeeze blood out of stone, so don't try to squeeze money from the market when conditions are not in your favor. Very few traders can make money in a market with no range or volatility, the payoff would most likely be too small to be worth it even if you could trade this thing profitably.
You can't squeeze blood out of stone, so don't try to squeeze money from the market when conditions are not in your favor. Very few traders can make money in a market with no range or volatility, the payoff would most likely be too small to be worth it even if you could trade this thing profitably.
Smart. The public are subliminally pulled into the kill zone [day trading]. Vendors, brokers...they're all at it.:eek:I don't know about you, but I didn't start making money consistently until I started swing trading. The price setups are still the same except you have more time to plot your move and if you're right, an opportunity to make more money.
My experience is the opposite. If I avoided every swing trade I ever did (and they were almost all profitable the first couple months because every buyer looks like a genius in a bull market), I'd have saved myself a boatload of money.
It's all about experience, though. With almost 6 years of experience and knowledge, the instrument(s) and time windows no longer matter to me now.